Stifel Previews Q4 Earnings for Potash Corp./Saskatchewan

Stifel previewed earnings for Potash Corp./Saskatchewan (USA) POT which will report on January 29 before the market open.

Analyst Paul Massoud expected Q4 earnings to come in a $0.47 versus the consensus of $0.46.

Massoud maintained the “outlook that 1Q14 was the low point for potash prices, as market fundamentals strengthened through 2014 as a result of producer discipline, declining inventories and stronger y/y demand.”

The firm also saw the supply agreement between Canpotex and Sinofert as a catalyst for higher potash prices and third-party reports indicated that suppliers are currently seeking $335 per tonne cfr for 1H15 which is 9.8 percent higher than the 1H14 period.

Massoud also thought that supply constraints would boost prices in 2015 “following the closure of Uralkali’s Solikamsk-2 mine (2.3 million tonnes of annual capacity or roughly 3 percent of global supply).”

The firm maintained a Buy rating on the stock and a $41 price target.

Ahead of the the earnings release the stock was rising, up 3.65 percent since January 21.

Potash Corp./Saskatchewan (USA) recently traded at $36.43, up 1.50 percent.